Qualcomm likely to benefit from fast start for iPhone sales

Qualcomm supplies radio chips; Peregrine Semi has less silicon in latest models

FILE - In this Friday, Sept. 20, 2013, file photo, a sales person pulls out an iPhone 5s for a customer during the opening day of sales of the iPhone 5s and iPhone 5C, in Hialeah, Fla. Apple says Monday, Sept. 23, 2013, that shoppers snapped up 9 million of its newest iPhones since the devices were launched Friday, and that demand is exceeding supply. (AP Photo/Alan Diaz)
— AP

FILE - In this Friday, Sept. 20, 2013, file photo, a sales person pulls out an iPhone 5s for a customer during the opening day of sales of the iPhone 5s and iPhone 5C, in Hialeah, Fla. Apple says Monday, Sept. 23, 2013, that shoppers snapped up 9 million of its newest iPhones since the devices were launched Friday, and that demand is exceeding supply. (AP Photo/Alan Diaz)
/ AP

Apple got off to a fast start this past weekend with sales of its latest iPhones. That’s good news for one San Diego semiconductor marker and not so good news for another.

Qualcomm retained its 4G multi-mode radio chip in the new iPhone 5s and iPhone 5c, as well as transceiver and power management silicon. The San Diego wireless giant has supplied radios and related chips to Apple since the iPhone 4 came to Verizon.

Peregrine Semiconductor lost a main antenna switch that it previously supplied to Apple in recent iPhone models, according to Canaccord Genuity Analyst Mike Walkley. Skyworks and RF Micro Devices replaced Peregrine, he said.

Peregrine retained a different antenna switch in the new iPhones, so it still has silicon in the devices. It just doesn’t have as much.

Walkley downgraded Peregrine’s stock from “buy” to “hold” because of the short term impact of the news. Long term, Walkley sees improved growth trends for Peregrine as more high speed Long Term Evolution, or LTE, networks are built worldwide.

“We believe Peregrine’s main antenna switch design win in the world’s first LTE Advanced smartphone – the Samsung Galaxy S4 LTE-Advanced – is a strong indicator of this trend,” Walkley wrote in a research note.

On Monday, Apple said it sold a record 9 million new iPhone 5s and 5c models since their debut Sept. 20. That beat many analysts’ forecasts. William Power of Baird Equity Research predicted first weekend sales of 7 million.

Apple added China to the mix of countries where it launched the new iPhone models. But Power said it was unclear how many of the phones were actually sold there. Apple lacks an official distribution deal with China’s largest mobile operator – China Mobile – and its iPhones remain relatively expensive compared with competitors such as Huawei and ZTE.

Christopher Rolland, an analyst with FBR Capital Markets, said there had been speculation that Qualcomm would win the Wi-Fi/Bluetooth connectivity chip in the new iPhones. But that didn’t happen, as Irvine-based Broadcom continued as the connectivity chip supplier.

Qualcomm’s shares ended Tuesday down 47 cents at $68.51. Peregrine’s shares were unchanged at $9.28 on the Nasdaq.